I have carried out the 1Y > TD conversion with no problem. There is no gaurantee that your 1Y has the cooling jets, but mine did and there will be many other 1Y's that have them also. Off the top of my head, if your cylinder head number is 028 103 373 J, then its very likely it has TD head (plasma coated exhaust valves), pistons, block (with cooling jets) etc... just minus the turbo and pump. You will need to drill and tap the block M20 or somthing like that for the return pipe, or find a 1.6GTD sump with oil return (thats what I did).
Some had the cooling jets, some didnt have them. You will need to get a TD pump with boost enrichment and also, which isnt as important, have your injectors shimmed to 140 - 160 bar. I have mine set to 160, which should drop a bit after some running. Mk3 TDi intercooler and pipework will all bolt up no problem. I used a GT15 but the K03 and K14 are good too.
Check that head number, its behind injector 1 and let us know. If it is a TD short motor, its probably got more life than the same turbo'd motor of the same age, but they are durable either way.
Regards, DM